I firmly believe that the best way to invest in ASX shares is for the long-term.
That means we need to think about where the earnings will be headed over the next year, three years, five years and so on.
It’s impossible to know what share prices will do in any week or month, but businesses that can keep grow their earning power will become more valuable over time.
That’s why I’m attracted to these three ASX shares:
Altium Limited (ASX: ALU)
Altium is my favourite ‘growth’ share on the ASX. I think it ticks all of the boxes – no debt, strong cash position, good cashflow, high and growing profit margins, a very good tailwind and a rising dividend.
The ‘Internet of Things’ is expected to be very beneficial for Altium’s earnings in the 2020s, which could send its revenue and profit higher and higher. Altium’s plan to reach 100,000 Altium Designer subscribers is exciting and Octopart could be a good profit driver over time.
Altium’s valuation is the only thing stopping me from buying today, but if it drops a bit further and goes materially under $30 I may top up my holdings in light of how low interest rates are.
Costa Group Holdings Group Ltd (ASX: CGC)
Costa is Australia’s largest horticultural company, it grows tomatoes, mushrooms, avocadoes, berries and citrus fruit.
Agricultural businesses can deliver lumpy earnings year to year, but when the earnings are low it could be a good time to load up on shares, particularly as Costa diversifies its earnings in new locations and with more farms.
I think Costa is one of the best agricultural businesses on the ASX, which is why I’d be happy to buy shares at today’s lower share price.
MFF Capital Investments Ltd (ASX: MFF)
The ASX isn’t the only place to find exciting growth shares. There are many good quality shares listed overseas which have very powerful economic moats. Indeed, I think it would be a mistake to miss out on those quality businesses.
But it can hard to know where to invest with thousands of international businesses, which is why I’m happy to leave the investing to a high-performer like Chris Mackay at MFF Capital. It has been one of the highest-performer listed investment companies over the past decade and it also pays a dividend.
With its low management fee, I think MFF Capital could be one of the best ways to invest into overseas shares on the ASX.
Costa looks like the cheapest growth option to me, but over the long-term I think the quality of Altium could shine through and therefore create the best returns by 2025, which is why it would be my pick if the markets fall a bit further.
These top ASX shares could also be good growth options for a market-beating portfolio.
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Motley Fool contributor Tristan Harrison owns shares of Altium, COSTA GRP FPO, and Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019